Tax Roundup, 7/16/2013: States to be in when it rains. And IRS advice for picking a payroll service.

July 16th, 2013 by Joe Kristan

States with umbrellas. The Tax Foundation’s map this week shows how well the states are doing at maintaining “rainy day funds.” Iowa does pretty well.

Some states don’t bother. Unsurprisingly, Illinois is one of them. (Richard Borean, Tax Policy Blog)

The IRS has good advice in Tips for Employers Who Outsource Payroll Duties issued yesterday. Many employers have had to pay their payroll taxes twice after unscrupulous payroll providers have made off with their funds. Two tips worth repeating:

Enroll in the Electronic Federal Tax Payment System and make sure the PSP or RA uses EFTPS to make tax deposits. Available free from the Treasury Department, EFTPS gives employers safe and easy online access to their payment history when deposits are made under their Employer Identification Number, enabling them to monitor whether their third-party payer is properly carrying out their tax deposit responsibilities…

And:

Refrain from substituting the third-party’s address for the employer’s address. Though employers are allowed to and have the option of making or agreeing to such a change, the IRS recommends that employer’s continue to use their own address as the address on record with the tax agency. Doing so ensures that the employer will continue to receive bills, notices and other account-related correspondence from the IRS.

Remember that if you are using a “professional employer organization,” you may not be able to monitor whether your payments are being made through EFTPS, making it critical to ensure the PEO’s trustworthiness in other ways. Nobody wants to pay their payroll taxes twice.

Tax reform advocates say that because “Congress has made more than 15,000 changes to the tax code” since 1986, the code needs to be reformed. At first blush, this number leaves a pretty poor impression not just of the code but also of Congress. An alternative view could be that succeeding Congresses have been about continually improving the code.

An alternative view could be that drinking a half-pint of bourbon for breakfast would make me a better accountant. And that might be true if I were already in the habit of starting the day with a whole pint.

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on Tuesday, July 16th, 2013 at 8:36 am and is filed under Tax Roundup.
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